CONSERVATIVE co-chairman Baroness Warsi has been cleared by a House of Lords investigation of expenses irregularities, the party said today.

House of Lords Standards Commissioner Paul Kernaghan has conducted an investigation into allegations that she claimed for accommodation expenses while staying at a friend’s house rent-free.

In a statement, Lady Warsi, from Dewsbury, said she was "delighted" to draw a line under the matter, while Prime Minister David Cameron said it cleared the way for her to lead the Conservatives’ campaign for the election of police and crime commissioners later this year.

Lady Warsisaid: "I believe that being a member of the House of Lords is a privilege and I take that privilege seriously.

"I have always maintained that the allegations surrounding my expenses were untrue and I am delighted that Paul Kernaghan has dismissed them. His report and the report by Sir Alex Allan - two independent inquiries - have now drawn a line under these matters and my only focus now will be to get on with my job."

Mr Cameron said: "I am pleased that these allegations have been dismissed by the Lords Commissioner.

"With elections for police and crime commissioners in the autumn, this will be a big summer of campaigning for the Conservative Party. As co-chairman, Sayeeda (Warsi) will be leading that campaign."

The Kernaghan report relates to a property in Acton, west London, belonging to Lady Warsi's friend, Naweed Khan, where she stayed for a period in 2008.

At the time, the peer was claiming Lords subsistence of £165.50 a night for staying away from her main home in order to attend Parliament.

Mr Khan supported her assertion that she made an "appropriate payment" to him for the nights she stayed in Acton.

But the property’s owner, GP and former Conservative donor Wafik Moustafa, denied receiving any income from either Lady Warsi or Mr Khan.

Former chief constable Mr Kernaghan launched his inquiry last month after receiving a complaint from Labour MP John Mann.

House of Lords authorities were not immediately able to confirm the contents of Mr Kernaghan’s report.

Mr Cameron’s adviser on ministerial interests, Sir Alex Allan, conducted an investigation last month into separate allegations against Lady Warsi, and found that she was guilty of only a "minor" breach of the ministerial code in relation to a trip to Pakistan with a business partner in July 2010.

Sir Alex said then that the Cabinet Office minister accepted that she should have informed officials of her relationship with Abid Hussain - a second cousin of her husband - and had already issued an apology.

A House of Lords spokeswoman said: "The Commissioner for Standards has written to Baroness Warsi advising her that he would be submitting a report on her case to the Sub-Committee on Lords’ Conduct in early August.

"He stated that he had dismissed the allegation that she had wrongly claimed expenses for overnight accommodation costs in London.

"He did, however, find that she had breached the Code in relation to her failure to properly register a property in the Register of Lords’ Interests.

"He acknowledged that she had already written to the chairman of the Sub-Committee recognising that failure and apologising for it. He would be recommending that that apology, along with her corrected entry in the Register, constituted appropriate remedial action and that no further action was required.

"The Sub Committee on Lords’ Conduct will consider the Commissioner’s report in the autumn and will report to the Privileges and Conduct Committee which will then formally publish the Commissioner’s findings by means of a report to the House."